Jing Liao

Doctor of Philosophy, (Finance)Study Completed: 2010College of Business

Citation

Thesis Title
An examination of the determinants of performance in relation to the divestiture of State-owned assets in China

Read article at Massey Research Online:

Ms Liao investigated two features of China’s Share Issue Privatization (SIP) that stand out when compared with privatization in other countries: regional disparity and the insider-controlled board structure. She showed that the success of privatization in China is highly correlated with measures of regional disparity, particularly product market competition. Ms Liao discovered that under the highly concentrated ownership structure and insider-dominated boards of listed firms that characterise Chinese firms, independent directors are unable to carry out monitoring work and therefore are limited to providing advice to top management, satisfying the government and signalling the market. Independent directors were introduced into China to protect small shareholders from expropriation by dominant shareholders but this has been difficult to achieve. Ms Liao’s study highlights the impact of institutional structure at the country level on the efficiency of internal governance at the firm level.